Appendix E. Response to findings from the Forest Stewardship Council

Forest Stewardship Council®

13 April 2023

Environmental Paper Network (EPN)

Mr. Sergio Baffoni http://www.environmentalpaper.org

Email: Sergio.Baffoni@environmentalpaper.Org

SUBJECT: RESPONSE TO LETTER FROM 23 MARCH 2023 ON RGE FINDINGS

Dear Sergio,

Thank you for providing FSC an opportunity to respond to the points in your report prior to its publication. We will also address your inquiry regarding the Djarum case and how FSC is dealing with the withdrawal of certification by organizations with active Policy for Association allegations. Please note that FSC does not have the details to comment on specific findings related to RGE and its affiliates and activities. RGE should answer to some of your findings that FSC is not able to provide comment on, but we have taken note of these findings and look forward to the publication of the report

It is integral to FSC that APRIL engage with EPN and other stakeholders on critical and emerging issues around its activities and impacts on Indonesian forests The quality of this engagement and ability for APRIL to build trust with stakeholders and rights holders in the remedy process is a key success factor We hope you are able to have a fruitful exchange with APRIL around these critical issues.

With best regards,

Marc Jessel

Chief System Integrity Officer FSC Global Development GmbH

Finding 1: Findings relating to the “public summary” of the FSC Baseline Analysis of APRIL Group published in November 2020

The baseline exercise conducted by FSC on APRIL covered the scope of the disassociation defined by indirect involvement in the FSC Policy for Association version 2. The exercise did not include third party suppliers as these suppliers are not part of the disassociation. The objective of the baseline was to understand the quantification and where possible to qualify the Policy for Association issues APRIL was involved in, as FSC did not have the opportunity to conduct an investigation of the PfA allegations at the time of disassociation. This is because APRIL withdrew its FSC certifications before this investigation took place.

Finding 2: Findings relating to the FSC’s Remedy Framework as it relates to the APRIL Group

Clarification of point 2.1: An organization must first end disassociation before pursuing full forest management certification.

Clarification of point 2.3: The definition of corporate group is found in the FSC Policy for Association version 3 and AFI is the reference for this definition.

Finding 3: Findings relating to deforestation and practices of companies within the RGE Group’s supply chain

FSC takes note of these findings.

Finding 4: Findings relating to a new mega-scale pulp mill currently under construction on the island of Tarakan in north-eastern Kalimantan

FSC takes note of these findings.

Finding 5: Findings relating to the RGE Group’s links to woodchip, forestry, and pulp companies

As part of the FSC remedy framework process with APRIL, FSC will conduct an assessment of the RGE corporate group according to the Policy for Association version 3 definition of corporate group and according to FSC’s internal methodology for conducting corporate group assessments. FSC is currently working on the development of this methodology. The corporate group assessment conducted by FSC on RGE shall determine the scope of the FSC remedy framework. FSC takes note of EPN’s findings on the relationship between RGE and BCL and PT Phoenix Resources International.

Inquiry regarding status of Djarum

FSC conducted a proactive independent evaluation of significant conversion by members of the Djarum group of companies in 2019. FSC’s assessment identified Policy for Association concerns which Djarum disputed at the time. Djarum withdrew its FSC certification. Within the coming weeks, FSC will be working on a statement for the Djarum case page to update stakeholders regarding the conclusions of the assessment and developments that have taken place since

Inquiry on how FSC is managing future cases of organizations withdrawing certification to avoid Policy for Association concerns

Learning from the APRIL case and more recent cases such as Djarum, version 4 of the procedure for processing PfA complaints provides new avenues for FSC to react to manoeuvres to avoid PfA allegations or consequences of PfA violations. For example, FSC can now complete

PfA evaluations on organizations which have withdrawn certification, rather than these evaluations being abandoned or terminated. Further, under the new procedure, FSC can now move directly to convene an independent decision panel to take a decision on association without investigation where FSC has sufficient information to support this action. Previously, FSC could not move to a decision on association without conducting an investigation, no matter how strong the evidence of violation of the PfA.

Appendix F. Parties presented with findings that did not provide comment

Eleven parties mentioned in the above analysis were shared a list of the report’s findings and invited to provide comments that would be included in the report. Five of those parties responded, and their comments are integrated in the text and presented in full in the above appendices. From the remaining six parties, no responses were received. These parties are: The Royal Golden Eagle (RGE) Group, PT Balikpapan Chip Lestari, PT Phoenix Resources International, PT Adindo Hutani Lestari, PT Industrial Forest Plantation, and PT Fajar Surya Swadaya.